News

While a mandatory silence surrounds the details of the recent "involuntary resignation" of former town manager Nick Pegueros from Portola Valley Town Hall, some Town Council members have been willing to talk about one aspect of Mr. Pegueros' contract: the clause that forbids Town Hall staff from talking about his departure.

A clause in the three-year agreement, signed in December 2014, says that the council, the staff and Mr. Pegueros himself cannot talk to "the public, the press, or any Town employee concerning the termination of this Agreement."

This imposition of silence on staff members raises questions about whether it abridges their rights to free speech, and whether it is enforceable.

Lawyers asked to comment on language meant to silence the staff have said that its purpose is probably to direct the council to direct Town Hall employees to be quiet.

Nikki Moore, an attorney with the California Newspaper Publishers Association, said the clause is probably unenforceable, meaning that a staff member could not be sued for talking. But talking about the termination could put that person's employment at risk, she said. Portola Valley Town Attorney Leigh Prince agreed.

Council comments

The Almanac asked the council members to comment on how that language made its way into the contract.

Councilwoman Maryann Moise Derwin said in an email she could not recall who proposed it, but said that the council was trying to give Mr. Pegueros "a contract that he was comfortable with" since the town manager had long been underpaid relative to contemporaries in the county.

"Given our history of friendliness and collaboration at Town Hall, I couldn't have imagined a scenario in which a manager would have parted on such terms that it would have actually mattered if the staff were chatty or silent," she said. "I certainly stand corrected on that naive thinking, and in a contract with a future town manager, I would not agree to many of the terms in Mr. Pegueros' contract. Steep and painful learning curve."

Councilman Craig Hughes said he saw only the contract's final version, after it had been handled by then-mayor Ann Wengert and then-vice mayor (and now mayor) Jeff Aalfs. Mr. Hughes said he recalled being told that Mr. Pegueros had described the framework of the previous contract as outdated.

Ms. Wengert did not respond to repeated requests for an interview.

"Town contracts must be able to control the actions of town employees to some degree (through their employment), or else they become effectively meaningless," Mr. Hughes said. "I think Nikki Moore is right that the employees could, of course, say whatever they like (if it's not slanderous) without legal repercussions, but as town employees, it is part of their job to not violate the terms of town contracts," he said.

Asked about the staff-silence clause, Mayor Aalfs said he doesn't remember who proposed it, but described it as "more a statement of intention than a binding statement."

Councilman John Richards said he could not recall discussing the matter, nor did he recall any controversy about it. "I can tell you that Nick did some very valuable things for the town, and that protecting his privacy was and still is a priority," he said.

Being nice

Noting that he could not discuss Mr. Pegueros' departure itself, Mr. Hughes did say this: "We went through an extensive process over many weeks to review Nick's performance before that termination occurred. I can also tell you that I would not ever be party to any coverup of illegal or suspected illegal activity, nor any activity that went against" the equal opportunity employment or misconduct sections of the town's personnel policies manual.

Mr. Hughes said the council will likely tweak "some sections" of the contract with the new town manager. But, he added, "mutual-non-disparagement clauses are familiar to me from the private sector for senior managers, so I didn't find it unusual that there should be one in our contract with Nick."

Asked whether private sector practices were appropriate in the public sector, Mr. Hughes said that non-disparagement clauses were not universal in the private sector, and acknowledged the validity of the question for a public employee with a $200,000 salary.

But senior-level jobs are few, he noted. If the separation is for reasons that do not involve illegal behavior or other "nefarious things," Mr. Hughes said, it is "somewhat more reasonable" for senior employees to have some control over what is said about them.

The employer is more likely to agree to such clauses if the management is enthusiastic about retaining the employee, as this council was in December, he said. "He was a town manager whom everyone felt was doing a great job," he said.

The council will be evaluating its contracts with a colder eye in the future, he said. If a candidate requests a mutual-non-disparagement clause, it would be appropriate to consider it, Mr. Hughes said.

Comments

6 people like this

Posted by Jennie
a resident of Menlo Park: Downtown
on Aug 31, 2015 at 8:19 pm

Since they can not talk about it, there must be more to the situation than what the people are being told.

Posted by fed up
a resident of Menlo Park: Sharon Heights
on Aug 31, 2015 at 8:38 pm

The naivete of these folks is stunning. A contract means what it says. Sounds like now one bothered to read what was negotiated and signed. No wonder these "underpaid" 200k/year employees keep asking for more - no one has the spine to say no.

Why did Menlo Park hire someone (even in a temporary capacity) who left under these circumstances. In December the entire Portola Valley council was pleased with the job Nick Pegueros was doing and in August (just 8 months into a 3 year contract) an "involuntary resignation"? I would like to hear an explanation from the City Council concerning Alex McIntyre's judgement.

Posted by Member
a resident of Portola Valley: other
on Sep 1, 2015 at 9:13 am

Mr. Boyce,

I realize this is such an 'exciting' story for you to hang on to, however you should be ashamed of your continued sensationalism of it. People's livelihoods have no doubt already been affected and not just that of Mr. Pegueros.

The circumstance was obviously not illegal, or there would be a criminal component. And obviously enough of a detriment to the Town for the Council to pay severance and subject itself to the scrutiny of the residents and bored 'journalists.'

Posted by Not a member
a resident of Menlo Park: Linfield Oaks
on Sep 1, 2015 at 12:27 pm

No doubt Alex would like to see this story disappear - he's not one for transparency. Perhaps it's time to parade Nutty the Squirrel in front of the City Council to distract from this controversy. Investigative journalists doing their jobs? Oh no!!!

Posted by gunste
a resident of Portola Valley: Ladera
on Sep 1, 2015 at 12:36 pm

Personally, I believe that anyone who is fired or forced to resign for cause should not be protected by silence about the cause. If he has done something illegal or highly unethical, the facts should be known to those taxpayers who paid his salary. Further, in his application for employment in his next job, he must lie and hide his misdeed if he wants the position. Any references must be dishonest if the cause of discharge is not provided. Everyone must bear the responsibility for his/her actions.

Steep & painful curve is right. This only makes it all worse. And have Mr.Boyce not investigate? Why because we don't want our pretty town put in an ugly spotlight? That's the problem--folks aren't interested in the press doing their job. I'm glad he is! I also want to know why he was fired. Guess we never will. Altho this is a tiny town--you know we'll find out filled w distortions! Yes let's resort to gossip! Sigh!!

Every article I have read about this situation is contradictory. Here are my questions:

(1) Did Nick request that he be fired/asked to resign, or did the Town Council request that he resign?

(2) Nick received a 3% raise in April. At what point did the Town Council decide that his performance was unsatisfactory? They state that they examined his work "over many weeks." How many?

(3) It seems Nick unhappy with the previous contract, and wanted the "no discussion" clause included in the new contract signed in December---and the Town Council agreed to it, in order to keep him as Town Manager. Then, within weeks, they decided that his performance was lacking, or they wanted to renegotiate the contract, and he refused. Which is it? Craig Hughes' statement rules out "illegal, suspected illegal behavior, misconduct, or equal opportunity---ACCORDING TO THE TOWN'S PERSONNEL MANUAL--or other nefarious activities."

What's defined as misconduct by the Town's personnel manual? What's defined as equal opportunity? Easy to find that out.

Posted by Not a member
a resident of Menlo Park: Linfield Oaks
on Sep 1, 2015 at 1:23 pm

What does the City of Menlo Park Mayor have to say about this hiring choice? The Menlo Park Council praised Alex McIntyre for being able to hire good staff as the main reason they renewed his contract. Does the Menlo Park Council stand by that statement or are they ready to acknowledge that they too are experiencing a 'steep and painful learning curve' when it comes to their City Manager.

It occurs to me that Craig only addressed the misconduct and equal opportunity sections of the personnel manual. Clever----because this leaves a whole host of other sections available that Nick could perhaps have violated. Conflict of Interest? Nepotism? Any of the other many sections listed under "Miscellaneous?"

The personnel manual PDF file is easily downloaded if you google Town of Portola Valley Personnel Manual.

Posted by Experiment
a resident of Menlo Park: other
on Sep 1, 2015 at 1:52 pm

The silence clause simply shows that Nick is the smartest city manager this town has ever had. In business, the CEO serves at the pleasure of the board. When a CEO is ejected, people assume there was a disconnect between the vision of the board and the CEO.

Posted by Not a member
a resident of Menlo Park: Linfield Oaks
on Sep 1, 2015 at 3:23 pm

Transparency is correct. Alex doesn't get it, and neither do the City staff posting on this forum who are doing his bidding. Public employees - City Managers - are not COE's and if they can't be bothered to disclose the truth they have no business working as public servants. City Council needs to get a clue.

So, if a staff member told the Almanac what happened but insisted that his/her name not be used to protect her/his job, and the Almanac printed that info without name attribution -- could then the town of Portola Valley take legal action to require that the Almanac disclose who talked? Curious.

Posted by Member
a resident of Portola Valley: Central Portola Valley
on Sep 1, 2015 at 4:02 pm

The worst part to me was not the facts concerning Nick's departure, but how the Town Council has handled the transition to a new interim Town Manager.

No public announcement was made directly to residents.
Instead residents all heard what had happened from word of mouth or the local press.

This led to lots of questions about transparency, the process and what led to Nick's "involuntary resignation."

I think Town was remiss in not putting an announcement on the Town's webpage on how the public should handle inquiries that were formerly addressed to Nick Pegueros and that Debbie Pedro is now PV's interim Town Manager.

I would also like Town to post the Town Manager's job on the Town's website. This would help to overcome transparency issues and be useful in helping residents understand what is involved in running Town government.

I agree with the comment above. Why hasn't Mayor Carlton issued any statements regarding this unusual hire or any statements about the recent departures of senior staff at City Hall? I admire Council Member Mueller's restraint in not gloating, "I told you so" to the press since he was the lone vote against the City Manager's contract. It's starting to look like he nailed it.

Posted by Sidney
a resident of another community
on Sep 1, 2015 at 7:16 pm

This reads as if the town of Portola Valley really needs a competent city attorney more than they need a city manager! Ditto for the City of Menlo Park. Presumably when Menlo Park contacted Portola Valley to make inquiries (they did, didn't they?) but got the gag order response, what part of that non-response did NOT send up red flags all at once? The old excuse that over paid city manager types are sooo hard to find is ridiculous.

If a prospective employee with unverifiable previous employment performance presented me with an employment contract with a binding gag order upon termination, and my attorney gave it a green light, I'd fire the lawyer and rescind the offer of employment.

Posted by Not a member
a resident of Menlo Park: Linfield Oaks
on Sep 1, 2015 at 7:25 pm

I trust the Almsnac to keep their sources confidential - and the courts aren't going to expose any whistleblowers here. spill it to the press, please! The Citu Managers need to be exposed for trying to deceive the public. The taxoayers have a right to know.

Posted by pogo
a resident of Woodside: other
on Sep 1, 2015 at 8:41 pmpogo is a registered user.

"If a prospective employee with unverifiable previous employment performance presented me with an employment contract with a binding gag order upon termination, and my attorney gave it a green light, I'd fire the lawyer and rescind the offer of employment."

If that was a candidate's response, I wouldn't even ask my lawyer or bother with a job offer. That type of concealment is simply far too suspicious.